The fire started with an explosion in an underground vault near Polk and O'Farrell streets -- workers at a neighboring auto repair shop say it shook the place.
The first firefighters to arrive knew they could not put water on an electrical fire so they called for carbon dioxide to smother the flames.
"Our CO2 unit arrived on the scene and applied CO2," San Francisco Fire Department spokesperson Mindy Talmadge said.
But minutes later, PG&E workers told the fire department to pull back and flames once more billowed from the manhole.
"They need the system to fail before they could get in there and get the electrical shut off," Talmadge said.
Firefighters closed off a two block radius around Polk and O'Farrell. The smoke stopped and then started again and within minutes balls of flame were rising 20 feet above the street.
Police ordered onlookers to move back and most businesses near the fire closed. A shelter-in-place was ordered and residents took refuge from the thick, black smoke.
An hour into the fire, engines began rolling in, but a PG&E spokesman still could not say if the power was shut off or what exactly was burning.
"We're just working on getting things taken care of safely and quickly," PG&E spokesperson Tamar Sarkissian said.
Safely and quickly is sure to be an issue between the power company and the fire department.
As the smoke began to clear the fire department said a secondary electrical source had kept the fire going which ignited a barrel of oil used for cooling the power company's equipment. The oil is mineral oil, which is non-toxic, but the San Francisco Department of Health took samples of the oil from inside the vault for testing.
The Bay Area Air Quality Management District also took air samples following the fire. Results from the air testing will not be available until Monday.
About 550 Pacific Gas and Electric Co. customers remained without power in San Francisco's Tenderloin neighborhood as of 1 p.m. Saturday.The lengthy outage initially affected about 8,600 customers
In the block, bordered by Ellis Street, Van Ness Avenue, Geary Street and Larkin Street remained off limits to anyone who doesn't live there. Even residents who live in the affected area had to be escorted back home. That's because PG&E crews were at the explosion site investigating and trying determine what caused the explosion.
PG&E has, in the past, reimbursed businesses that have lost power for extended periods of time. Businesses can contact PG&E for details at 1-800-PGE-5000.
Vault explosions and fires have happened before, with far more serious consequences.
In August 2005, an explosion in an underground PG&E transformer vault on Kearny Street, outside the Crocker Galleria mall, critically injured a woman. It blew the sidewalk up six inches and a manhole cover flew 25 feet.
At the time, PG&E said it immediately began inspecting all of its underground electrical equipment.